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The Central Bank of Bahrain has signed an agreement to cement ties with the Monetary Authority of Singapore in a move to improve regulatory transparency, as government-backed companies at rival financial centre Dubai suffers further downgrades.

In a release sent out today, the CBB confirmed that it has signed a Memorandum of Understanding with the Monetary Authority of Singapore at yesterday's World Islamic Banking Conference, which was held in Bahrain.

The agreement formalises links between the two regulators, and will help cross border activities, data sharing and staff training, the CBB said in a statement.

Sheikh Mohammed bin Essa Al Khalifa, chief executive of Bahrain's Economic Development Board said in a statement: "Bahrain is committed to transparency and international cooperation in financial services and this deal will help us to maintain that commitment. We take pride in the quality of our regulation and we look forward to working with MAS to continue this tradition."

Bahrain's regulatory approach has been criticised in some quarters but has stood up relatively well to the tests of the financial crisis, despite the proliferation of banking institutions in the kingdom. At a conference at the sidelines of Bahrain's grand prix in June, Khalid Hamad, head of banking supervision at the CBB said that the regulator had stopped granting new banking licenses to encourage consolidation among the 360 banks that hold licenses in the country.

The move comes amid turmoil for its rival financial centre, Dubai, whose problems - triggered by Dubai World last month requesting a six month standstill agreement from creditors - were exacerbated today when government-backed companies suffered further downgrades.

Moody's today said it had downgraded all six Dubai government related issuers as it said that "no meaningful government support should be assumed for any entity that is not directly part of or formally guaranteed by the government".